ONGC rose 4.75% to Rs 202.80 at 10:09 IST on BSE after the company said its board approved acquiring 51.11% stake of President of India in Hindustan Petroleum Corporation.
The announcement was made on Saturday, 20 January 2018.Meanwhile, the S&P BSE Sensex was up 150.48 points, or 0.42% to 35,662.06.
On the BSE, 7.36 lakh shares were traded in the counter so far, compared with average daily volumes of 6.32 lakh shares in the past one quarter. The stock had hit a high of Rs 206 and a low of Rs 198 so far during the day. The stock hit a 52-week high of Rs 212 on 31 January 2017. The stock hit a 52-week low of Rs 155.30 on 27 June 2017.
The stock had underperformed the market over the past 30 days till 19 January 2018, rising 2.98% compared with 5.20% rise in the Sensex. The scrip had outperformed the market in past one quarter, rising 12.46% as against Sensex's 9.64% rise.
The scrip had underperformed the market in past one year, falling 1.93% as against Sensex's 31.36% rise.
The large-cap company has equity capital of Rs 6416.62 crore. Face value per share is Rs 5.
ONGC's board on 19 January 2018, approved acquisition of the entire 51.11% shareholding of Government of India (GoI) in Hindustan Petroleum Corporation (HPCL), at a cash purchase consideration of Rs 473.97 per share with a total acquisition cost of Rs 36915 crore. The parties expect to complete the transaction before end of January 2018. Shares of HPCL were down 3.47% at Rs 402.10.
The acquisition has been undertaken in furtherance of the Government's objective to combine the various central public sector enterprises to give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders and create an 'oil major' which will be able to match the performance of international and domestic private sector oil and gas companies.
ONGC expects that as an integrated oil conglomerate, its performance will be less affected by the volatility of crude prices due to diversification of its cash flows to midstream and downstream presence through HPCL, lower earnings volatility, diversified cash flows and lower business risk resulting in better valuation and higher shareholder value. HPCL and ONGC have a complimentary asset portfolio and through this acquisition, ONGC is gaining a midstrealll and downstream presence and access to a marketing network. ONGC will also gain access to marketing network of HPCL which could be synergistically utilised for projects such as MRPL, OPaL.
ONGC's net profit rose 3.1% to Rs 5130.74 crore on 3.1% growth in net sales to Rs 18964.85 crore in Q2 September 2017 over Q2 September 2016.
ONGC is the largest producer of crude oil and natural gas in India, contributing around 70% of Indian domestic production.
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